Non-performing loans (NPLs), liquidity creation, and moral hazard: Case of Chinese banks

Artikel

Background: This study analyzes the impact of non-performing loans (NPLs) on bank liquidity creation to investigate the existence of moral hazard problem in Chinese banks. Methods: It uses data from 197 listed and unlisted Chinese banks, spanning the period 2005 to 2014. Generalized method of moments (GMM) estimation, fixed and random effect model, and pool data techniques have been used for analysis. Results: Total liquidity creation by Chinese banks is declining, and NPLs ratio has started to increase following a continuous decline between 2005 and 2012. We find that liquidity creation by Chinese banks does not depend on NPLs ratio. We repeated the analysis for small and large banks and the results of these subsamples reinforced our findings for the aggregate sample. Conclusions: We did not find the evidence of moral hazard problem in Chinese banks.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: China Finance and Economic Review ; ISSN: 2196-5633 ; Volume: 4 ; Year: 2016 ; Issue: 1 ; Pages: 1-23 ; Heidelberg: Springer

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Thema: Bank ; Liquidity creation ; Non-performing loans ; Moral hazard ; China

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Umar, Muhammad ; Sun, Gang
• Ereignis: Veröffentlichung
• (wer): Springer
• (wo): Heidelberg
• (wann): 2016

Weitere Informationen

• DOI: doi:10.1186/s40589-016-0034-y
• Handle: http://hdl.handle.net/10419/162039
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ